ONG seeking $99 million annual rate hike


Saturday, January 29th 2005, 2:56 pm
By: News On 6


OKLAHOMA CITY (AP) _ Oklahoma Natural Gas Co. customers would be paying about $120 a year more if the state Corporation Commission approves the utility's request for a $99.4 million annual rate hike.

ONG spokesman Don Sherry said the rate hike is needed to help the utility recover the more than $190 million the company has spent on improving and maintaining its pipeline infrastructure in recent years.

``That money was used to upgrade our system and invest in technology that supports the system, all of which is intended to provide customers with the most reliable and safest service we can provide,'' Sherry said.

The company also has had about $50 million in other expenses since its last rate hike in 1990, Sherry said.

The Oklahoma Attorney General's Office promised a thorough review of the company's proposal. The attorney general can represent consumers in rates cases before the Corporation Commission.

``It's going to go under some very strict scrutiny,'' said Assistant Attorney General Bill Humes.

Industry analyst John E. Olson said ONG must be allowed a rate increase to remain competitive.

``Oklahoma Natural Gas is clearly overdue for rate relief, considering how meager their realized returns have been over the past number of years,'' said Olson, an analyst with Sanders Morris Harris in Houston. ``It's time to take care of this utility. Otherwise, the service assets and everything else will slowly and steadily erode.''

Although ONG's rates haven't been raised in a decade, customers' bills have increased because of the rising cost of natural gas. ONG passes its gas costs on to customers with no markup.

Gas prices have tripled since 1999, when it was being sold at about $2 per thousand cubic feet (mcf). Gas prices now are hovering around $6.25 per mcf.

Lanetha Smith, community relations development director for the Oklahoma City chapter of the Salvation Army, said the increase could hamper ONG's Share the Warmth fund, a voluntary program administered by the Salvation Army that allows ONG customers to donate money to help low-income Oklahomans pay their heating bills.

``A $10 a month increase will increase the need for help dramatically and will perhaps push some people who have been making it on their own to the point where they need assistance,'' Smith said.

ONG serves about 800,000 customers and is one of three gas distribution firms owned by Tulsa-based Oneok Inc.

Under state law, the Corporation Commission has 180 days to review ONG's request and issue an order in response. A hearing schedule has not yet been set.